- VICKERS DEFENSE SYSTEMS AND GENERAL
DYNAMICS LAND SYSTEMS FORM JOINT
VENTURE COMPANY -

STERLING HEIGHTS, Mich. -- Vickers Defence Systems (VDS) and General Dynamics Land Systems (GDLS) announced today that they will form a joint venture company, Vehicle Armour and Armament Ltd (VAA Ltd), to progress work on the stealth reconnaissance TRACER/FSCS program. Both companies are key members of the SIKA International consortium, established by British Aerospace and Lockheed Martin to compete for the multi billion dollar TRACER/FSCS program. SIKA was awarded a 3½ year development contract worth $146.6 million in January 1999.

Colin Clark, chief executive of Vickers Defence Systems said, "The Joint Venture company, Vehicle Armour and Armament Ltd, will enable VDS and GDLS to provide the SIKA consortium with the most cost effective chassis and weapon system solutions for the TRACER/FSCS requirement."

Arthur J. Veitch, president of General Dynamics Land Systems said, "We are extremely pleased to form this joint venture company with Vickers Defence Systems as a method of creating synergy between our engineering staffs to facilitate the best technical solution for the SIKA consortium, the United States and United Kingdom."

The new company, to be based in Newcastle, England, will be responsible for the design and production of a demonstrator as well as providing other significant design and management support activities. This will ensure that both parent companies maintain their leading positions in the design, development and manufacture of armoured vehicles for the future. The current development contract is due to be completed in mid 2002, and the planned In Service Date/Initial Operational Capability for TRACER/FSCS is 2008. The UK plans to acquire 335 vehicles, the US 1,076 vehicles.

The Vehicle Armor & Armament work in the demonstrator program will consist of the design and development of the chassis and weapon system including: Track and Suspension, Power Pack, Auxiliary Automotive Systems, Driver's Controls & Displays, Core Vetronics, NBC/Climate Control, Armor, Driving Vision, Situational Awareness/Direct Vision, Fire Control, Weapon Station Drive, Armament, and Secondary Weapon.

Other Vickers Defence Systems products include the new British Army main battle tank, Challenger 2; the Challenger 2E Main Battle Tank for export markets; the BR90 tactical modular bridging system and a comprehensive range of training aids and simulators.

Vickers Defence Systems is part of the Vickers group of companies. Vickers plc is a UK based international engineering company with products which command global leadership in specialist markets with growth potential. The group's principal activities are land defense systems and equipment, marine propulsion systems and motion control equipment, superalloys and components for the gas turbine and automotive industries.

General Dynamics Land Systems, located in Sterling Heights, Michigan, USA, is a supplier of land and amphibious combat vehicles to the United States and its allies. A subsidiary of General Dynamics Corporation (NYSE:GD), its 3,500 employees operate seven plants in the United States and three international facilities.

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LS-99-4
5-19-99